Have you ever heard of a disadvantaged business enterprise? As the name suggests, this type of business is targeted to disadvantaged groups. Only they can set one up, after going through all the required steps. If you want to find out more about what a disadvantaged business enterprise is, and learn if you qualify for one or not, you’re going to enjoy today’s article. Furthermore, we’re also going to tell you how to set yours up. Let’s have a look!
Disadvantaged Business Enterprise Definition
As we’ve mentioned in the introduction to this article, a disadvantaged business enterprise (DBE) is a small business owned primarily by people who are economically and/or socially disadvantaged. These people own at least 51 percent of it. Moreover, they’re the ones who control all the business operations and management. If you’re wondering who qualifies for a DBE, the answer is some groups which are consider disadvantaged, such as Native Americans, Hispanics, African Americans, Subcontinent and Asian-Pacific Asian Americans, and women. Still, you can also apply for a DBE as an individual case.
What the law sees as economically disadvantaged are people whose personal net worth doesn’t go over $1.32 million. The small business in itself can’t have average annual gross receipts higher than $22.41 million.
How to Set a DBE Up
1. Make Sure the Business is Feasible
Before starting a business, you have to do your best to ensure it will succeed. Many small businesses fail in less than 2 years after launching. Which is why you should rely on an expert who can tell you how you should go about when you’ve just started with the business. You should also create a detailed business plan and stick to it. This will help you check whether you’ve reached your goals. Finally, don’t forget about your business license and complying with tax and code regulations.
2. Check Whether You Qualify for a DBE or Not
According to whether or not you’re a member of one of the groups we mentioned above or of other minority groups, the government will decide if you’re disadvantaged or not. Other requirements include owning at least 51 percent of the business, proofing that you’re the one directing the company, and your business meeting all the standards of a small business.
3. Get a Certification
No one recognizes a DBE without a certification. When going through the DBE certification application, you have to keep in mind both federal and state regulations. For instance, the Unified Certification Program that runs at a federal level stops you from seeking to become certified more than once. If you do get certified, all state recipients have to recognize you as such.
4. Maintain Eligibility
Once you get your certification, you’re not automatically certified for life. You have to always keep a DBE certification checklist as proof that you’re eligible. Which is why we advise you to go through ongoing procedures that document your affiliation to a disadvantaged group, your ownership of the business, how much you’re worth, and so on.
If you think you qualify for a disadvantaged business enterprise, don’t hesitate to apply for a DBE as soon as possible.
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